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A congressional subcommittee recently questioned Dan Sokolov, deputy director of the research department at the Consumer Financial Protection Bureau, about whether the agency will hinder small businesses. Mr. Sokolov said the Dodd-Frank Act limits the CFPB to regulating only major banks and nonbank financial firms, such as payday lenders. The CFPB is concentrating "on financial products and services for consumers," Mr. Sokolov said. "The bureau does not have jurisdiction over small-business credit except in limited cases where Congress has explicitly and affirmatively granted the bureau such jurisdiction."

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The Consumer Financial Protection Bureau's proposed payday lending rules would cause lenders offering regulated loans to lose 70% of their business and would wipe out storefront payday lenders, according to a study by Clarity Services. A separate report from Charles Rivers Associates found that the rules would reduce payday loan revenues by 82% for small lenders.

Twenty-six U.S. House representatives from Florida are urging the Consumer Financial Protection Bureau to look to Florida's law for guidance on payday loans and revise its recent proposal accordingly. "To ignore our experience, which has proven to encourage lending practices that are fair and transparent without restricting credit options, would do an immeasurable disservice to our constituents, many of whom rely on the availability of short-term and small dollar loans from regulated, licensed non-bank lenders to make ends meet," they wrote in a letter.

The Consumer Financial Protection Bureau used "incomplete and misleading" data in its recent report on payday loans, says the Consumer Financial Services Association of America, a group that represents payday lenders. In a letter to CFPB Director Richard Cordray, the group says the CFPB based its conclusions on only a small segment of the industry and adds that any crackdown will prompt consumers to turn to unlicensed online lenders.

President Barack Obama used a recess appointment to name Richard Cordray as director of the new Consumer Financial Protection Bureau. The move bypassed Republican senators who had vowed to block any nominee to lead the new agency. Cordray's appointment expands the CFPB's reach and authority. The financial industry has been closely monitoring Cordray's nomination. CBA President Richard Hunt said the nomination would lessen the regulatory discrepancies between depositories and non-bank firms such as payday lenders. "One of the few great aspects of the CFPB is that you get a level playing field between banks and non-banks," said Hunt.

A congressional subcommittee recently questioned Dan Sokolov, deputy director of the research department at the new Consumer Financial Protection Bureau, about whether the agency will hinder small businesses. Sokolov said the Dodd-Frank Act limits the CFPB to regulating only major banks and non-bank financial firms, such as payday lenders. The CFPB is concentrating "on financial products and services for consumers," Sokolov said. "The bureau does not have jurisdiction over small-business credit except in limited cases where Congress has explicitly and affirmatively granted the bureau such jurisdiction."